MarkSaha

Look Out! China Bubble Could Blow Anytime

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Talk about a real estate bubble! This will be HUGE if it happens. Not only dwarf ours, but the the tsunami could roll right over us too.

Any opinions on this? Is it BS?

See Krugman for details but?

Will China Break? -

Paul Krugman

http://www.nytimes.com/2011/12/19/opinion/krugman-will-china-break.html?_r=1&scp=1&sq=krugman%20china&st=cse

The video is simply astounding.

VIDEO: CHINAS GHOST CITIES

http://www.sbs.com.au/dateline/story/watch/id/601007/n/China-s-Ghost-Cities

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That has to be the scariest case of "we say so" run amok I have ever seen. Especially since the end result is still a work in progress, as if the part already in existence isn't enough of a horror in its self.

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Maybe so and maybe not. China is a totolitarian state. They can do things we can''t. It's still a worrisome development.

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Whoever is supplying the capital for these projects will be the only ones to lose out.

Joe Blow Chinaman living in squaller at the footstones of these grand places will continue to live by their means. They have not yet been conditioned to live beyond their means.

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I watched the video last night. It's got to be a concern, the trickle down effect, that's sure to impact us somehow. However, the real estate bubble in China is different then what happened here so it may be hard to predict what course it will run. In China, it appears the bubble is being created by the Government's contracting and ordering the building of giant cities... which then sit empty because everyone is too poor to afford to live in them. Looks as if they are headed for some massive civil unrest as opposed to an economic recession.

All those people's homes being bulldozed to build housing for the affluent segment of the population... that don't actually exist. It's odd, possibly unprecedented? Unless it has happened in another country before, it may be difficult to predict the outcome.

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Paul must be a member of GBTV now.. Glenn warned about this over a year ago :rolleye0014: Matter of fact most of Glen so called "RANTINGS" are falling into place..:smileywavey:

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Paul must be a member of GBTV now.. Glenn warned about this over a year ago :rolleye0014: Matter of fact most of Glen so called "RANTINGS" are falling into place..:smileywavey:

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He was makin sense, that's why they canned him.

Can't have the truth gettin in the way of the agenda.

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I watched the video last night. It's got to be a concern, the trickle down effect, that's sure to impact us somehow. However, the real estate bubble in China is different then what happened here so it may be hard to predict what course it will run. In China, it appears the bubble is being created by the Government's contracting and ordering the building of giant cities... which then sit empty because everyone is too poor to afford to live in them. Looks as if they are headed for some massive civil unrest as opposed to an economic recession.All those people's homes being bulldozed to build housing for the affluent segment of the population... that don't actually exist. It's odd, possibly unprecedented? Unless it has happened in another country before, it may be difficult to predict the outcome.

Word

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Paul must be a member of GBTV now.. Glenn warned about this over a year ago :rolleye0014: Matter of fact most of Glen so called "RANTINGS" are falling into place..:smileywavey:

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The law of averages says Beck must hit upon something occasionally. The problem is figuring out which rant.

It's taken a few years to build these cities and has not gone unnoticed.

Krugman is wondering how much longer China can get away with insisting these properties are a good investment. It is a serious problem that China counts them as "wealth". They are about as valuable as defaulted bonds.

One analyst in the video compares it to the Egyptians building pyramids. It creates jobs, but the product lacks the practical utility of a toaster.

Edited by carlofab

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Guy Risdall on NPR has had a few stories on this over the past year or so. No ranting or raving. Just clear reporting on who, what, why, where and possible outcomes from someone that understands economics and financial markets.

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Do you remember what he said, wolfhaven?

I'm with tokengirl because opinions are all over the map. Krugman complains the lack of hard data makes it impossible to do more than speculate.

FWIW, surely the government funds these projects. No sane construction company would do so on spec. (Any that did would have gone bankrupt by now).

But China has a huge economy. If they can afford to build these pyramids, it will do them no harm. Only if they had to redeem their investment would its true value be exposed.

The other problem is how it affects the real estate market in China. I have no idea. Possibly it has no affect on property values in key port cities or, e.g., Hong Kong.

Visually, it's a stunning stupidity. If somebody knows anything...

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I was just curious what the guy said :confused0024:

The area I see for concern is if they are regularly bulldozing lower income homes to replace with upper income housing, many people will be displaced that may have few options for relocation.

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I was just curious what the guy said :confused0024:

The area I see for concern is if they are regularly bulldozing lower income homes to replace with upper income housing, many people will be displaced that may have few options for relocation.

Yep, I think you're right, tokengirl.

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They were news stories from a while ago and I don't remember the specifics. He touched on the dislocation issue. City and provincial leaders were/are getting rich off of forcing seniors and the poor to sell the home that's been owned for generations. Then through selling permits they allow developers to come in with private and state financed loans to build large developments. Those booted out can't afford rent in the new buildings and are pretty much screwed. A big piece of the problem is there is little opportunity for rich individuals to invest their money in anything but real estate. Chinese investment in international markets is generally done by state owned corporations, not individuals who aren't allowed to. Which I do believe is starting to change. The Chinese government controls their currency very tightly and secretly. They have plenty of cash to bail out banks if needed delaying the inevitable crash for quite some time. The American reporter Guy Risdall was talking to in the last story lives in a high rise apartment complex with just a couple of other tenants. Guess communism can't beat greed.

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